THE EFFECT OF MACROECONOMIC AND INSTITUTIONAL DETERMINANTS ON FOREIGN DIRECT INVESTMENT INFLOWS: EVIDENCE FROM EGYPT

This paper explores the major determinants of foreign direct investment (FDI) flows to Egypt over the period 1991-2024. Using time - series annual data for Egypt over this period and the fully modified ordinary least square (FMOLS) econometric method, this research attempts to shed light on how a set of independent variables including GDP per capita growth (economic growth), inflation, institutional quality and trade openness impact FDI. Based on the analysis conducted, there exists a stable and long - term relationship between FDI, on one hand and economic growth, inflation, institutional quality and trade openness on the other. All factors tested except inflation have a positive impact on FDI. The research therefore suggests that policymakers need to promote economic stability, develop strong institutions and maintain integration with the global economy.

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